‘Peak house’ was in 1966, new AMP report shows

The great Australian dream of home ownership is alive and well today, with more than 66 per cent of households owning a home (either outright or with a mortgage), according to the Australian census 2021.

But according to new research from AMP and the executive director of The Demographics Group, Bernard Salt AM, the ‘peak’ in home ownership was actually in 1966, when 73 per cent of Australians owned a home (either outright or with a mortgage), and is unlikely to reach that level again.

According to the ‘What Wealthy Means to Australians in 2023’ report, which reviews census home ownership data from 1911–2021 for the first time, the fall in home ownership can be attributed to a range of factors, including the rising cost of property and societal changes.

For example, the report found that while homes are still the predominant wealth asset for Australians, more people now view the term ‘wealthy’ to mean having the financial freedom to live the lifestyle they want.

While this may include home ownership, it also includes more liquid forms of wealth, including savings, equities, and other managed investments. 

Speaking at the launch event for the report on Tuesday (28 February), demographer Mr Salt noted that some of the drop in home ownership immediately following 1966 may be attributed to a change in the wording of the home ownership question in the census but elaborated that societal changes were the perhaps the major contributor to the macro trend of falling home ownership.

“The greatest lift in home ownership on the Australian continent was 1947 through to 1966. In 1966, people remembered the Great Depression, they were either in the Second World War, or they remember war rationing. To the generation that peaked home ownership on the Australian continent, home security meant absolutely everything,” Mr Salt explained.

However, he added that in the decades that followed, society went through a “liberation” from the “structured society” of 1966. He flagged milestones such as the inclusion of Australia’s Indigenous population in the census, female “liberation” and increased female engagement in the workforce, no-fault divorce being approved in 1975, and family formation coming later in life all contributing to a populace that valued quality of life and liberation over the traditional ideals of home ownership and security.

“There was a cultural shift after 1966 as the War and Depression generation subsided, and Baby Boomers and others took effect,” Mr Salt said, leading to the ‘hippie’ and then, later, ‘hipster’ epochs.

“You can see over the last 55 years, from 1966 to 2021, there has been a 10 percentage point downshift in the proportion of Australians or households that are owned outright. So you would say, over the last half century, our concept of what is important, of wealth, has shifted.”

Mr Salt told Mortgage Business that while current-day Australians still have a range of wealth goals that include home ownership, society is also focused on the pursuit of “options like how and where we work, in how and when we form relationships and in how we choose to live our lives”.

Speaking to Mortgage Business, the demographer said that while the cost of property in Australia had increased “significantly” in the past decade and would have contributed to the drop in home ownership, he reiterated that “the reality is that there is a megatrend that’s been in play for 55 years; so [cost] doesn’t explain everything”.

“It’s more likely this shifted [because] of the way we want to live. We want the freedom to dissolve an unhappy relationship. We want the freedom to not have kids at 23 but to get a degree and to trial relationships and trial careers. that is more important to us today,” he said. 

“[Society will] trade off 1 or 2 percentage points or more in order to have women access to the workforce, in order to be more inclusive, to have the right to dissolve an unhappy relationship.

“Look at how we’ve changed; the freedoms we’ve gained ... We’re happy to trade down a bit. Not everything, but just a bit a few percentage points in order to get that quality of life.

“As a society, we are pursuing freedom, flexibility, options. That’s what we want in terms of how we want to run our lives.

“Our core values, and the way we live, have changed over the last 50 years or so.

“Even with the pandemic and low interest rates, you can get [home ownership levels] up 1 per cent but it’s not going back to 73 per cent. Because the cost does not align with our modern values.”

Alexis George, AMP’s chief executive, commented: “The report shines new light on our nation’s attitudes to wealth, what we value and how we manage our finances, which has shifted significantly over the past 50 years.

“No longer anchored just to home ownership, the concept of wealthy is now defined by a financial ability to pursue unique passions and goals, which often includes helping those close to us.

“Modern-day wealth requires us to consider what our goals are and to put a financial plan in place. The earlier we do this, the more likely we are to achieve those goals,” flagging the importance of improving financial literacy so that Australians can achieve the wealth they want.

[Related: Outright ownership falls over 25 years: ABS]